Wednesday, December 04, 2002

More economic wrongness

Jane Galt quotes Musil, incorrectly asserting how IP in the public domain too can get "overgrazed". Answer -- someone can use it in a way that gives it negative connotations and so reduces its value. Urgh. Musil gives the example of a Cole Porter song that was parodied in the toilet cleaner add, and cites the harm done to the Cole Porter estate as a result. The argument is really tortured, because the song actually was under copyright and the Cole Porter estate (productive artists all) did not charge the toilet cleaner company enough to make up for subsequent loss of sales.

This to me seems like mismanagement by owners, not any kind of "overgrazing". (Note: The whole "overgrazing" idea comes from a story called "The Tragedy of the Commons". The economic lesson behind this has been so mangled by so many people that I refuse to ever refer to it again. Just be warned, if someone refers to something as being a "Tragedy of the Commons", 90% chance it's not.)

While you can build economic models where other people's preference builds into your own (Becker, again) saying this will neccessarily happen with public domain IP is dead wrong, because a bad externality is just as likely as a good externality, if not less so. One can certainly think of more examples of public domain material becoming more valuable because of subsequent innovation on top of it (every fairy tale any one of us can think of) than less so, and public domain goods stay available more thanks to distributed filesharing.